Conservative Party Conference 2004

Speech by Stuart Henderson, Chairman of CIC.

Chairman, Ladies and Gentlemen

I am pleased to have this opportunity to address you about investing
in better public services.

I am sure that we here want better public services. Current opinion
polls confirm that research shows that most people in the country
want better public services. Many policies for achieving that will
no doubt be debated and polished in the months to come as an election
looms.

Whatever the details of adopted policies, it is pretty certain, that in many
ways, implementation of those better services will as a precondition rely
upon delivery by the wider construction industry.

Improved public infrastructure in the form of:

Schools

Hospitals

Social Housing

Transport

Provides the base for delivering netter services and benefits everyone,
people of all ages, from every walk of life.

The Construction industry’s relationship with the Government
of the day, our industry’s biggest single client and sponsor,
is vital; and this opportunity to discuss how we should work closely
together to deliver better value for money in those programmes that
in their turn deliver better services for the nation is crucially
important

This is recognised by all sections of our industry - employers,
unions professionals and product suppliers.

It’s vital not only to those 2½ million men and women
who work every day in our industry, but society as a whole.

The industry has a track record of delivering. We have responded
to the demands of the current major programmes to address infrastructure
renewal.

We have invested in:-

Recruitment

Training and upskilling

Plant and material developments

We co-ordinated design teams

We adopted modern procurement processes using longer term relationships
and developed supply chains

We resourced and financed

We researched and developed

It’s a shame then, that despite all the talk it just isn’t
happening

Almost in every area spend is fading.

Targets are being missed.

Others are at risk of being missed.

The Construction Product Association’s superb report ‘Achievable
Targets’ highlights where the Government is already
behind and getting further and further behind.

For example:

The integrated ten year transport plan is in disarray, effectively
cancelled, with road and rail, capital and maintenance spend
nowhere near planned necessary levels

Procurement 21, the hospital building plan has spend levels
not yet half that planned.

One point I would like to nail right at the onset is the suggestion
that there are capacity problems in the industry.

This is nonsense –

A complete red herring.

Our industry always delivers its projects and programmes

It has a clearly demonstrated ability to respond to steady and
sustained growth.

++++++++++++++++++++++++++++++++++++++++++++++++++

The industry has its eyes open and is however looking to the future.
We recognise that there are issues.

We need to recruit - part to expand -part to replace those retiring

We need to upskill our people

We need to retain people our works our

We need to make the industry safer

For the past few years, CITB has run advertising campaigns targeted
at young people during the summer just as the GCSE exam results come
out.

This year it was a TV campaign, on channels you and I don’t
usually watch, with the by line Make something of yourself.

70,000 people responded.

Post campaign research shows that the image of the industry has
risen significantly from dirty to worth joining with good pay.

The industry has developed the CSCS card scheme to demonstrate
competence and a sound practical knowledge of health and safety.

The card says I am a professional. I am a safe worker.

CSCS was initially founded in the site-based needs - in the trades
working on site and site management. This scheme has now been extended
through the efforts of CIC to include a route for those not based
on site but who are members of the construction team such as engineers
and surveyors. They still have to do an H and S test too.

We are building the more responsive, capable industry that is required
to deliver the needs of the country.

But we also know that UK college courses are full.

Potential students are being turned away from colleges as they
are short of lecturers.

We need a joined up approach so that the loop is closed; for example,
on the supply side through timely and adequate LSC funding of college
courses.

The past few years have seen a fragmentation of the interfaces
between the industry and Government. There are many departments involved.
There was even a period when there was no Minister for Construction
or one for whom Construction was another portfolio in a rather long
list of portfolios. The Construction Directorate at DTI is not what
it was and we feel we have slid down the food chain.

As if all of that wasn’t enough, recent changes to the funding
of construction research and development by the DTI have put at risk
construction research programmes. Funding for construction research
has virtually dried up.

So it is vital that DTI recognise the funding needs of construction
bodies like:

BRE

CIRIA

CRISP

And that ways are found to support their research and development
programmes for the future.

We feel this matters. If we are to play our part in facilitating
better public services then the parts of all the players should be
recognised. Let’s find a way of getting round the table.

In the early days of Private Finance Initiative, you set up the
PFPE- recruited from the industry to facilitate encourage and cajole
the use of PFI. In short to make PFI work - and it worked. The team
identified the key solution to the hurdles and blockages, based on
hands on experience and industry knowledge. The message here is hands
on understanding and application make things happen. Press releases
do not of themselves deliver.

AS an industry we also know smooth consistent work flow delivers
best value for money.

The message is simple: Our industry works best with long term planning.

We therefore plead that you adopt a strategic approach to better
services, with consideration given to the details of implementation,
to the input required from us and careful attention to the processes
of delivery.

F ocus on the overall strategic programme, rather than on individual
projects or programs

Address the public sector’s lack of
procurement expertise.

Sort out the processes; recognise that
there will be obstacles and resource to clear them

Private sector clients manage their building programmes efficiently
and effectively by repeating and learning.

They don’t insist on new terms and new processes for each
part of their programme.

Their learnt experience delivers even better and better value as
the programme goes on.

This is an example the public sector should follow

It’s surely not unreasonable to expect a greater degree of
uniformity across individual Government departments and agencies’ procurement
practices

We need a more centralised approach to the best value procurement
process.

And while we are on procurement -

Public sector employees need to be guided and encouraged to make
decisions using best value evaluations.

Lowest price provides an easy but usually wrong yardstick to use
for project award and best value for money

Part of the industry response to Build for the Task was to look
at what mechanisms would deliver best value for the nation’s
money.

We found them in two major in-depth industry reports.

Latham and Egan both came to the same solid conclusions encompassing
the best experience we could find.

World leading conclusions accepted by all sides of industry – Government
included.

Best value not cheapest price

Principles always found in

Togetherness

Partnering

Supply chains

Co-operation not confrontation

We all know this is the best way to work, but

Local Authorities are really reluctant

Government departments and agencies – still reluctant – are
each doing their own thing

Network Rail – God bless it, is returning to the days
of competitive tendering for almost everything

We ask you to change this.

We really need a Government that is a best practice client

to implement

to lead others through a cultural change;

to adopt what we all know to be best practice

Let’s stop talking about it – let’s do it.

Also, understand that in Government you will, as the major client,
have significant procurement muscle. Don’t be frightened to
use it to increase and improve procurement standards.

Only put on your select lists those suppliers:-

Who have improved health and safety

Who look after their workforce

Who train and upskill them

Who are improving quality

Who are giving better value

Finally a word about affordable housing. This includes both rented
and shared ownership homes. The delivery of better public services
also relies upon public sector workers and others for whom affordable
housing is a primary need. It is therefore we suggest a priority.

To conclude

Help us with regulations, don’t hinder us

Help us with long term steady state, not stop/start, programmes

Help us with the town planning processes

Help us with R&D funding

Help us with better procurement processes

Help us to deliver better value

Then together we can provide the people of this country with
the first class public services